The object of this Bill is to enable me, as Minister for Finance, to ensure the continued efficient operation of State financial transactions.
The measures in it are such as would be reasonable to cater for any temporary disruption or threat of disruption in the public finances. This need not necessarily be due to a strike but could be due to any other factors and it is, therefore, desirable in the widest sense that this Bill be passed.
I propose now to refer to the provisions contained in the Bill. First I wish to draw the attention of the House to two minor errors in the Bill as circulated. In section 1 on line 22 of page 2, the word "Exchequer" is misspelt and in section 2 (2) (c) on line 49 of page 3 the word "reference" should be in the plural and the comma after the word should be omitted.
Section 1 contains some necessary definitions. Provisions for commencement and termination are contained in section 2 (1). I would point especially to the provisions in section 2 (1) (a) that before making any arrangements under the Act, the Minister for Finance will be required to be satisfied that due to special circumstances it is impossible to carry on business in the normal manner and may accordingly, in the national interest, make whatever special arrangements are deemed necessary.
As Minister for Finance I am responsible under the Ministers and Secretaries Act, 1924, for:
the administration and business generally of the public finance of Ireland and all powers, duties and functions connected with same, including in particular the collection and expenditure of the revenues of Ireland.
I wish to make it clear that it is the Minister for Finance alone who is responsible for the State's financial business. Many of the functions carried out by the Central Bank on a day-to-day basis are delegated to it for reasons of convenience. This, of course, is a reference to functions other than the statutory functions of the bank as laid down in legislation.
The collection of the State's revenues and payments of the State's expenses are, rightly, the subject of careful statutory restriction. Article 11 of the Constitution provides for payment of all the revenues of the State into a single fund, known as the Central Fund, and payments into and issues from that fund are regulated by law.
Section 2 of the Bill provides, if necessary, for the introduction of special revised arrangements for operating the Exchequer and State accounts and for carrying out certain State financial transactions, and it is the purpose of the first important part of the Bill, section 2 (2), to provide statutory support for these arrangements.
A statute which is particularly relevant in this regard is the 1866 Exchequer and Audit Departments Act. This old statute is still the basic Act governing much of the State's accounting practices. It sets out strict controls in relation to the lodgment of revenues to and the issue of moneys from the Exchequer account involving the Comptroller and Auditor General in his capacity as Comptroller of the Exchequer. The office of the Comptroller and Auditor General have been fully consulted by my Department in relation to the preparation of this legislation and that office agree with the need for the proposed legislation. The Governor of the Central Bank has been consulted on the preparation of this legislation.
The Bill provides for my Department to consult with the Comptroller and Auditor General in relation to any arrangements made and it will be the intention of my Department to provide arrangements which satisfy him. The arrangements made will, of course, be subject to review by the Comptroller in the normal course.
The only statutory function of the Central Bank affected by this Bill is its operation in relation to the Exchequer account. The Central Bank's other main functions in relation to the operation of monetary policy which includes the regulation of credit, interest rates and the management of the official external reserves and also its role in relation to bank licensing and supervision and exchange controls are not affected by the Bill.
The second important part of the Bill, section 2 (3), empowers me to postpone by order the redemption of, or the payment of interest or dividends on, Government domestic securities where I am satisfied that it is not possible to make such payments. I regret to say that during the Central Bank strike it will not be possible to make dividend payments on domestic Government stocks or land bonds listed on the Irish Stock Exchange issued before the commencement of the strike on 3 December 1984; or to redeem domestic securities falling due for redemption during the period of the strike, where the registers of such issues are held by the Central Bank. These registers, which include both computerised and manual systems, contain details of many thousands of accounts, and without access to the registers it is not possible to make the payments where due.
Section 3 sets out the procedure for arranging for the redemption of, or payment of interest or dividends on, securities postponed under section 2 (3) when the situation returns to normal. A new date for the redemption or payment of interest or dividend may be fixed by me and this new date must be within three months of the end of the strike or whatever special circumstances required the postponement. The section also provides that interest will be payable on payments which were postponed and the order will specify the actual rate.
Section 4 provides for the laying of orders made under the Bill before each House of the Oireachtas and section 5 is the normal provision for administrative expenses.
To sum up, this Bill is necessary to enable the Minister for Finance to fulfil his statutory responsibility for the administration and business generally of the public finances; to ensure that he has adequate statutory support for such temporary measures as are needed to maintain operations on the Exchequer and other related accounts and to provide for payment of interest to persons who may be deprived of interest or dividends or repayment of capital owing to the temporary inability of the Minister for Finance to ensure payments.
Failure to take the proposed measures would cause very substantial disruption to the State's financial business and very considerable inconvenience, and hardship in many cases, to ordinary citizens. Even with the measures in place there could still be considerable inconvenience.
I commend this Bill to the House as a realistic and sensible measure to ensure the continued smooth operation of the State's banking and financial business.